Equities and Indexes. Common Stock Preferred Stock Equity Index Bond Index. Common Stock. Definition Ownership shares in public companies Characteristics Voting rights Shareholder can vote for company issues, e.g., executive compensation, board of directors, auditing firm, etc.
AMZN joins S&P 500 on Nov 18, 2005
Announcement is made after market closing on Nov 14, 2005
Equally weighted stock indices place equal weight on each stock return, and call for a portfolio strategy that places equal dollar values in each stock.
E.g., Stock A has a return of 2% and stock B has a return of 1%. An equally weighted index of A and B has a return of
0.5*2% + 0.5*1% = 1.5%